Australia To Improve Film Industry Tax Support

by Mary Swire, Tax-News.com, Hong Kong

01 August 2011

Companies involved in making films in Australia are invited to make a submission about new legislation that will determine how the government's support for the industry could be improved.

In announcing the consultation on the exposure draft legislation the Assistant Treasurer Bill Shorten said: "This legislation will improve the efficiency and effectiveness of the government's support for Australia's great film industry."

There are over 2,400 businesses in Australia that work in the film and television industry. As part of the 2011-12 Budget, the government announced AUD56m (USD62m) in targeted assistance for the industry.

There are four major elements to the package including lowering the eligibility threshold for the Producer Offset eligibility for feature films, television and online programs from AUD1m to AUD500,000.

The second major element of the package is an increase to the Post, Digital and Visual Effects (PDV) Offset to 30% of qualifying Australian PDV expenditure worth AUD8m over four years.

The third major new measure is an expansion of eligible expenses so a greater number of production expenses can qualify as expenditure under the Producer, Location and PDV Offsets. Australian producers in all screen formats will benefit with more allowable production expenses with relevant insurances, legal, auditing and company fees, marketing, distribution and carbon offsets able to be claimed as qualifying expenditure.

The fourth significant new measure is that documentary producers with projects under AUD500,000 will benefit from new additional direct funding from Screen Australia.

Other industry support in the package includes:

• Documentary producers will benefit from the removal of the 20 per cent cap on 'above the line' qualifying expenditure under the Producer Offset;
• Short-form animated documentaries will be eligible for the Producer Offset;
• Television producers will benefit from the enhancement to allow 65 hours of programming to be eligible for the Producer Offset, rather than 65 episodes;
• Official co-productions will benefit from being able to claim relevant expenditure on foreign studio shoots under the Producer Offset; and
• International productions will benefit from an increase to the Location Offset rebate to 16.5 per cent and the ability to claim additional insurances and legal, auditing and company fees as qualifying expenditure.

Enhancements to the film tax offsets will be available to most productions starting on or after July 1, 2011, once the legislation is passed.

Submissions close by August 15, 2011, to allow for the introduction of the measures in Parliament later this year.

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